{"id":9483,"date":"2010-05-17T13:47:08","date_gmt":"2010-05-17T17:47:08","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9483"},"modified":"2010-05-17T13:47:08","modified_gmt":"2010-05-17T17:47:08","slug":"forex-daily-market-commentary-63","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/17\/forex-daily-market-commentary-63\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at 1400 GMT (EDT + 0400)<\/strong><\/p>\n

\u20ac<\/strong><\/p>\n

The euro depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2235 level and was capped around the $1.2370 level.\u00a0 The common currency remains severely on the defensive on account of heightened eurozone sovereign debt concerns.\u00a0 The common currency has not traded at these depressed levels since April 2006.\u00a0 European Central Bank member Nowotny said the euro is trading \u201cin an absolutely normal range\u201d and characterized the eurozone\u2019s fiscal deficits and ability to finance them as \u201cvery serious.\u201d\u00a0 Borrowings at the ECB discount window have surged recently and are now above \u20ac4 billion.\u00a0 The London interbank offered rate (Libor) for three-month loans in U.S. dollars reached its highest level in more than nine months at 0.46% today.\u00a0 The U.S. dollar Libor-OIS spread, a barometers of banks\u2019 reluctance to lend, grew to 0.25%, the highest level since 17 August.\u00a0 Three-month Libor rates have expanded for eleven consecutive weeks and this is important because approximately US$ 360 trillion of financial products worldwide are benchmarked to the rate.\u00a0 Credit default swap rates on several European countries continue to rise with Greece, Portugal, and Spain leading the way.\u00a0 In U.S. news, data released today saw the May Empire State manufacturing index decline to 19.11 from the prior reading of 31.86.\u00a0 March net long-term TIC flows expanded significantly to US$ 140.5 billion from the prior reading of US$ 47.1 billion while total net TIC flows grew to US$ 10.5 billion from the upwarly-revised prior reading of US$ 9.7 billion.\u00a0 The May NAHB housing market index will be released later in the day and data to be released tomorrow include April PPI, April housing starts, and April building permits.\u00a0 240 banks have failed in the U.S. since 2007 and a bill in the Senate would leave the Federal Reserve at the center of U.S. oversight.\u00a0 European Commission Financial Services Commissioner Barnier reported he will seek a U.S. agreement that CDS trades must be registered.\u00a0 Euro bids are cited around the US$ 1.2140 level.<\/p>\n

\u00a5\/ CNY<\/strong><\/p>\n

The yen depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the \u00a592.70 level and was supported around the \u00a591.75 level.\u00a0 Former Bank of Japan Policy Board member Taya today said \u201cThree to four years from now I expect a sovereign debt crisis to hit Japan and long-term interest rates to surge.\u201d Notably, Japan\u2019s public debt is nearly twice the size of its gross domestic product \u2013 the highest level among major industrial countries.\u00a0 Data released in Japan overnight saw March machine orders up 5.4% m\/m and 1.2% y\/y while the April domestic corporate goods price index was up 0.4% m\/m and off 0.2% y\/y.\u00a0 Also, April Tokyo-area condominium sales were up 22.6% y\/y.\u00a0 The March tertiary index will be released tonight followed by April consumer confidence, April machine tool orders, and April department store sales.\u00a0 The Nikkei 225 stock index lost 2.17% to close at \u00a510,235.76.\u00a0 U.S. dollar offers are cited around the \u00a596.85 level.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5114.55 level and was supported around the \u00a5112.45 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5131.05 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a581.75 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8277 in the over-the-counter market, up from CNY 6.8266.\u00a0 Data released in China on Friday saw April foreign direct investment up an actual 24.69% y\/y, up from the prior reading of 12.08%.\u00a0 Yuan forwards weakened on new speculation that China may delay the appreciation of its yuan currency on elevated fears about Europe\u2019s debt crisis.\u00a0 Singapore, Japan, and France called for China to end its peg to the U.S. dollar.\u00a0 U.S. Treasury Secretary Geithner on Thursday said he is \u201cconfident\u201d China is going to allow its currency to reflect market forces.<\/p>\n

\u00a3<\/strong><\/p>\n

The British pound depreciated vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.4250 level and was capped around the $1.4545 level. U.K. Chief Treasury Secretary Laws reported Treasury officials and Bank of England officials noted it \u201cwould be responsible and safe\u201d to start reducing the fiscal deficit this year.\u00a0 Data released in the U.K. overnight saw May Rightmove house prices up 0.7% m\/m and 4.3% y\/y while the May CBI industrial trends total orders index improved to -18 from the prior reading of -36.\u00a0 April consumer price inflation data will be released tomorrow.\u00a0 Cable bids are cited around the US$ 1.4110 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8585 level and was supported around the \u00a30.84950 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1445 level and was supported around the CHF 1.1320 level.\u00a0 There is renewed speculation among some traders that Swiss National Bank will slow its purchases of euro for francs via official interventions.\u00a0 Foreign currency investments comprise about 60% of the SNB\u2019s balance sheet.\u00a0 The Credit Suisse ZEW survey will be released on Thursday followed by April money supply data on Friday.\u00a0 The euro gained ground vis-\u00e0-vis the Swiss franc as the single currency tested offers around the CHF 1.4015 level while the British pound lost ground vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6300 figure.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/p>\n

GCI Financial Ltd (\u201dGCI\u201d) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (\u201dForex\u201d) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (\u201dCFDs\u201d) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.<\/p>\n

DISCLAIMER: GCI\u2019s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n","protected":false},"excerpt":{"rendered":"

Former Bank of Japan Policy Board member Taya today said \u201cThree to four years from now I expect a sovereign debt crisis to hit Japan and long-term interest rates to surge.\u201d…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-9483","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9483","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=9483"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9483\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9483"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}